There are 3 ways for Directors of Legal Operations to collaborate with Procurement professionals when the company decides to be more structured when retaining external counsel. The first is to collate solid data on consumption patterns for legal services: fees and hours by area of law; volumes by complexity level; detailed matter budgets. The second opportunity for collaboration concerns leading practices, technology, and infrastructure related to workflows and service delivery. With this comes structured practices and results applied to law firm performance. The third area of collaboration between legal operations and procurement is the migration away from hourly-based fee arrangements.

Some 80 per cent of law firms have no templates or standards for budgeting complex legal work. Few in-house counsel feel at ease analyzing and challenging matter plans and budgets prepared by law firms.

Budgets should set out the hours for each fee earner by phase and task of a matter. This should be done after communicating planning assumptions to yield a budget plan that is 85 per cent reliable for a most likely outcome rather than a worst-case scenario.

Retaining 100 local law firms in as many countries can be inefficient and expensive even if it is for routine litigation and employment issues. A study of invoices from 25 countries in 4 regions revealed that the scope of work was poorly defined, activity reports were sketchy, and pricing varied from fixed monthly retainers to hourly rates discounted by 70%. The company committed to harmonized practice patterns, centralization in retaining local counsel through regional coordinating firms, fixed fee pricing for 3 years, and matter management and reporting systems to support the new operating protocols.